×

Woori Gains on Privatization Hopes, CEO Leaves

Shares in South Korea's Woori Finance Holdings jumped as much as 5 percent to a near 7-month high on Wednesday as news that its CEO was to step down boosted hopes that Privatization plans could be speeded up.

Heads of several state-controlled financial institutions had offered to resign as part of a process of being reinstated by new President Lee Myung-bak, who was inaugurated in February.

While some of the chiefs won the backing of the new president, Woori Finance chief Bahk Byoung-won, and Park Hae-choon, CEO of Woori Bank, both of whom took office only last year, had their resignations accepted.

Chief executives at two other Woori Finance subsidiary banks are also quitting, the Korea Deposit Insurance Corp (KDIC) said in a statement. KDIC owns 73 percent of Woori Finance, which runs Woori Bank, the country's third-ranked lender.

Korea Development Bank (KDB) Governor Kim Chang-rok is also stepping down after his resignation offer was accepted.

The Korea Economic Daily reported earlier that people from the private sector will be preferred to bureaucrats to take over at the state-run institutions.

"Up to now, most of Woori Finance CEOs had been connected with the government," said Daiwa Securities analyst Chang Lee.

"Once a new CEO is recruited publicly, the new leader may be able to be more serious and dedicated to pushing for Privatization. That will show the government's commitment to Privatization."

The government is preparing to unveil detailed Privatization plans later this month.

The Financial Services Commission (FSC) expects to create a financial holding company for KDB by the year-end and will seek potential buyers, including foreign banks, for strategic investment.

Yoon Yong-ro, CEO of the Industrial Bank of Korea, and chief executives at the KDIC and Korea Asset Management Corp retain their posts.